# Crypto Futures and Basis > Dated crypto futures trade at a premium or discount to spot called the basis. Learn CME and exchange futures, how to annualise basis and what it tells traders. Source: https://learn.tradelabsai.com/crypto/crypto-futures-and-basis/ Track: Crypto · Level: Intermediate · Updated: 2026-10-03 Publisher: TradeLabs AI (https://tradelabsai.com). Education, not financial advice. Cite as: TradeLabs Learn, "Crypto Futures and Basis", https://learn.tradelabsai.com/crypto/crypto-futures-and-basis/ Besides perpetual swaps, crypto trades through dated futures that expire on a fixed date, such as monthly and quarterly contracts. They are listed on regulated exchanges like CME and on crypto native exchanges. Because dated futures converge to spot at expiry, the difference between the futures price and the spot price, the basis, tells traders how much the market is paying to hold leveraged long exposure. Crypto basis has at times been far larger than in traditional markets, creating popular arbitrage trades. ## Where crypto futures trade | Venue | Products | Notes | |---|---|---| | CME Group | Bitcoin (5 BTC), Micro Bitcoin (0.1 BTC), Ether, Micro Ether | Regulated, cash settled to CME reference rates | | Crypto exchanges | Monthly and quarterly BTC, ETH and altcoin futures | Higher leverage; varying regulation | | Options venues | Options on futures and spot | See [How Options Work](https://learn.tradelabsai.com/options/how-options-work/) | ## Basis and annualised basis ``` basis = futures price - spot price annualised basis = (futures / spot - 1) × (365 / days to expiry) ``` **Example: Reading the basis** Spot Bitcoin is $80,000. The quarterly future, expiring in 75 days, trades at $81,600. - Basis: $1,600, or 2.0% of spot. - Annualised: 2.0% × 365 / 75 ≈ 9.7%. That is the return a trader could lock in by buying spot and selling the future, holding until expiry, before costs. When US short term interest rates are around 4% to 5%, a 9.7% annualised basis signals strong demand for leveraged long exposure. ## Why crypto basis is often high In traditional markets, arbitrage keeps futures close to spot plus financing costs. In crypto, basis has often been higher because: - **Demand for leverage:** many traders want long exposure without paying full price. - **Limited arbitrage capital:** institutions face custody, capital and regulatory hurdles. - **Counterparty and exchange risk:** arbitrageurs demand compensation. In the 2021 bull market, annualised Bitcoin basis on some exchanges exceeded 30% at times. In bear markets, it has dropped near zero or turned negative. See [Contango](https://learn.tradelabsai.com/futures/contango/). ## Basis as a sentiment signal | Annualised basis | Typical interpretation | |---|---| | Very high (above 20%) | Euphoric, leveraged long demand | | Moderate (5% to 15%) | Normal bullish conditions | | Near zero | Neutral or cautious | | Negative | Bearish, heavy hedging or selling pressure | Basis and perpetual funding rates usually move together. See [Funding Rates](https://learn.tradelabsai.com/crypto/funding-rates/). ## CME basis and ETFs After US spot Bitcoin ETFs launched in January 2024, many hedge funds bought ETF shares and sold CME futures to capture the basis, a regulated version of the cash and carry trade. Changes in CME basis and open interest became closely watched indicators of institutional activity. See [Cash-and-Carry Arbitrage](https://learn.tradelabsai.com/futures/cash-and-carry-arbitrage/). ## Rolling dated futures Holders of dated futures must roll before expiry to keep exposure, selling the expiring contract and buying a later one. In contango, rolling long positions costs money; in backwardation, it earns money. See [Rolling Futures Contracts](https://learn.tradelabsai.com/futures/rolling-futures-contracts/) and [Roll Yield](https://learn.tradelabsai.com/futures/roll-yield/). ## Perps vs dated futures | | Perpetual futures | Dated futures | |---|---|---| | Expiry | None | Fixed | | Cost of carry | Paid through funding | Built into the price | | Basis risk | Funding changes every interval | Locked at entry if held to expiry | | Popularity | Highest volume | Used for basis trades and hedging | ## Risks - **Basis can widen or collapse** before expiry, causing mark to market losses. - **Exchange and custody risk** on crypto venues. - **Margin calls** on the short futures leg in sharp rallies. - **Settlement differences** between reference rates and spot. ## Frequently asked questions ### What is basis in crypto futures? The difference between a dated futures price and the spot price, often expressed as an annualised percentage. ### Why do crypto futures trade above spot? Mostly because of strong demand for leveraged long exposure and limited arbitrage capital, plus financing costs. ### How do you annualise the basis? Divide the futures price by spot, subtract 1 and multiply by 365 divided by the days to expiry. Next, learn how forced selling works in [Liquidations in Crypto](https://learn.tradelabsai.com/crypto/liquidations-in-crypto/). ## Continue learning - Next lesson: [Liquidations in Crypto](https://learn.tradelabsai.com/crypto/liquidations-in-crypto/) - Previous lesson: [Funding Rates](https://learn.tradelabsai.com/crypto/funding-rates/) - Related: [Funding Rates](https://learn.tradelabsai.com/crypto/funding-rates/): Funding rates are periodic payments between longs and shorts on perpetual futures. Learn how they are calculated, what extreme funding means and how to use it. - Related: [Funding and Basis Arbitrage](https://learn.tradelabsai.com/crypto/funding-and-basis-arbitrage/): Funding and basis arbitrage buys crypto spot and shorts perps or futures to earn the premium while staying neutral. Learn the mechanics, returns and risks. - Related: [Basis and Basis Trading](https://learn.tradelabsai.com/futures/basis-and-basis-trading/): Basis is the gap between a spot price and a futures price. Learn how hedgers manage basis risk, how basis trades work and the Treasury basis trade. - Related: [Contango](https://learn.tradelabsai.com/futures/contango/): Contango is when later futures trade above nearer ones or spot. Learn why it happens, how it erodes long commodity and VIX funds, and how traders use it. - Related: [Cash-and-Carry Arbitrage](https://learn.tradelabsai.com/futures/cash-and-carry-arbitrage/): Cash and carry arbitrage buys an asset and sells its futures when futures are rich versus carry costs. Learn the formula, gold, index and crypto examples, and risks.